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15:10 UPDATE: European equity markets are fighting back from this morning’s lows, while the euro is back in positive territory.

The FTSE 100 remains lower, down 0.15% at 6,312, but has been steadily rising from a low of 6,288 after some mixed data on the US economy.

One report showed initial jobless claims in the US claims jumped by 38,000 to 368,000 in the week ending 26 January, worse than anticipated, having declined in the previous two weeks.

A separate report showed US personal income rose by 2.6% in December, while spending rose by just 0.2%

On Wall Street the Dow opened slightly higher at 13,935, while the S&P 500 trended down to 1,497. Investors turn now to tomorrow’s labour report in the US, which will provide more clues about the economy after the surprise report yesterday that US GDP declined in the fourth quarter of 2012.

09:34: Weaker-than-expected results from oil major and Citywire Top Stock Royal Dutch Shell(RDSb.L) and a downbeat outlook from the boss of drugs company AstraZeneca(AZN.L) dragged the two blue chip shares to the bottom of the FTSE 100, which was suffering in line with markets across Europe.

Taking a break from the New Year rally, European markets followed Wall Street lower after the Federal Reserve said in its latest statement overnight that economic growth had stalled but indicated it would maintain its programme to buy securities. The Fed’s statement followed data that showed the economy unexpectedly contracted in the fourth quarter.

The FTSE 100 fell back by 0.4% or 30 points to 6,292, weighed down by a combination of banks and miners, with similar losses on German and French markets. Amid today's decline in investor sentiment and weak German sales data, the euro fell back, down slightly to $1.3558.

Market commentators immediately began questioning whether this was the start of the 'correction' that even the more bullish investors are expecting after such a strong start to the year for equities. 'The problem for stocks is that they have come too far a bit too fast and are looking extremely overbought,' commented Kathleen Brooks of Forex.com.

Shell's 'substantial miss'

In London, Shell shares dropped by 1.3% to 2,274p after the energy company reported a 15% rise in fourth quarter profits to $5.6 billion, less than expected by the City, while annual profits fell to $27 billion from $28.6 billion in 2011. Stuart Joyner of Investec described the quarter as a ‘substantial miss’ for Shell, adding that he was reviewing his recommendation on the shares.

Shell investors were handed a sweetener though with an expected 4.7% first quarter dividend boost, to $0.45. The fourth quarter 2012 dividend of $0.43 marks an increase of 2.4%.

Astra warning

Shares in AstraZeneca fell 5% to £29.94 after the drugs company announced full-year 2012 results which were a smidgeon below market expectations, with sales of $27,973 million, accompanied by a downbeat outlook for the year ahead.

Banks hit by FSA probe

Banking shares fell back after the UK’s financial regulator confirmed that Barclays(BARC.L), HSBC(HSBA.L), Lloyds(LLOY.L) and RBS(RBS.L) will start a full review of their sales of interest rate hedging products to small businesses.

In a preliminary review by the four banks ‘over 90% of the sales did not comply with at least one or more regulatory requirement’, the FSA said.

Ian Gordon of Investec said that unlike the costly mis-selling of payment protection insurance (PPI), ‘there is not an near-automatic presumption of guilt. We estimate that the incremental cost to the industry here could be c. £1bn.’

Royal Bank of Scotland and Barclays fell by more than 2% to 338p and 295p respectively

Shares in HSBC and Lloyds were both down around 0.4% to 720p and 50p respectively.

Diageo shares zig-zag

Shares in drinks company Diageo (DGE.L), another member of Citywire Top Stocks, were slightly higher, up 0.4% to 1,861p, having fallen in early trading after the Guinness maker delivered an inline financial update for the second half of 2012, with profit growth slightly better than expected.

‘We like the quality of the underlying sales trends… note that while other liquor companies have shown HoH deceleration DGE has not, and believe continued portfolio “tweaking” will further bolster the company’s growth profile,’ commented Liberum analyst Pablo Zuanic, who has a ‘buy’ rating on the shares.